By Jim Shimabukuro
Editor
Harris Kupperman, founder of Praetorian Capital, said, “Based on my conversations over the past month, the physical datacenters last for three to ten years, at most. Changes to cooling systems, chip and racking designs, power systems, and even overall layouts, mean that the buildings themselves are likely depreciating quite rapidly as well.
“Then when you consider that new GPU iterations, which seem to come out every year or two, effectively obsolete prior models, you realize that I should have been using a much faster depreciation curve [as little as three years] across the whole capitalized structure” (Steven Goldstein, “This AI skeptic got feedback from the industry – and now he’s even more pessimistic,” Morningstar, 6 Oct. 2025).
Kupperman’s prediction is based on the assumption that datacenters are being developed as closed systems on a linear timeline that’s set in early-October 2025. He fails to account for the openness that’s built into them for continuous upgrades and innovations as they occur in the real-world. These aren’t static systems. They’re dynamic, nonlinear, and recursive in conception, with constant change fed by R&D cycles as a fundamental design philosophy.
A glance at the leaders in datacenter construction and funding should make it obvious that they’re not fools pursuing a single branch on the evolution of AI. They’re keeping an eye on the entire tree as they focus on a branch that’s necessary for the next step.
Datacenter developments are part of a scaffolding that will incrementally lead to increasingly sophisticated AI, and the trajectory is exponential rather than linear.
The alarming aspect of datacenter size and proliferation is their unprecedented scale. We don’t have comparable models to provide perspective. It takes a stretch, a leap to even begin to imagine the enormity of the big picture. In short, the growth of AI represents a steep learning curve thatʻs continually updating.
For datacenter players and world leaders in the private and public sector, getting into the game is the first step, and they take it knowing that the alternative to investing now is to rapidly fall behind the rest of the world. Itʻs costly, but progress always is.
Filed under: Uncategorized |
Educational Technology and Change Journal 
Leave a comment